Equity Cost of Capital

Pounding, I believe i had more rec's on the message board than you? And no, I don't log in under multiple identities and give myself rec's.

Your GP tax, as you call it, is more a ratio of the amount the GP receives divided by the amount the LP receives. Using the total amount of cash paid out is the correct thing to do, because the denominator is essentially the distributable cash number that they quote. The numerator could be one of two numbers, either the amount that the GP gets, or the amount that the LP receives.

If you dig into KMI/KMP on an absolute bsais, and it is very messy due to KMR, but even on an individual unit basis, KMI(through its GP ownership) is receiving around 40%-44% of the total cash. This may not seem like a big deal, but if you look at where the 50/50 splits are at, and then look at the current distribution, it is simply breathetaking. It makes you realize Kinder is a genius. He and Duncan saw this long before anyone else (ok, the Buckeye guys but they never used BPL as a growth vehicle until the Carlyle guys came along). I have GP split speadsheet tables built for just about every MLP and GP and I use them to calculate the GP take on a per unit basis and on an absolute basis(just multiple by number of outstanding units) and will have to see if I can pull it up. Don't want to guess at how far past the 50/50 entering point he is, but he has gone very far. Will see if I can find it.

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